Credit institutions for individuals and companies

Ali Al Matani  - ali.matani2@gmail.com - As the economic activities increase in the Sultanate, we see increasing demands for individual and institutional finance, along with an increase in the financial and banking transactions in the form of loans and financial facilitations. It is important for us to have a company or institution to evaluate the financial efficiency of those that give credit to individuals and companies, just like the rest of the world. This can also help protect the lenders from risks that may emerge due to some wrong practices in the market, and the burdens associated with people’s rights, whether from the police, prosecution or judiciary in chasing those who dodge their payment dues. Establishing such institutions will save a lot of effort and money, and enhance the trust between dealers in the financial sector, and also the trust in the banking system in general. This will boost dealers’ and investors’ trust in Oman at the regional and international level. Such problems reveal the necessity of establishing such credit institutions with high added value to the financial sector. No doubt, the increase in financial transactions and demand for facilitations of different kinds from the financial sector is highly significant. However, protecting these institutions can promote bonding between lenders, loaners and investors through a transparent system that works on providing a neutral financial evaluation and financial “classification” that make financers aware of risks when financing individuals or corporations based on their efficiency, ability and reputation. It is important to facilitate outcomes that are appropriate with financial efficiency of loaners and those who desire financial facilitations. This requires urgent establishment of systems that promote protection of the financing structure and reduces risk on companies and institutions that deal with deferred payment across wide segments of beneficiaries. The market in the Sultanate needs such institutions that provide financial efficiency evaluation for individuals and companies. In addition, it will give a clear image of the situation of the loaner according to the indicators built upon a database of financial information that accurately shows its credit classification. Such a system will act as an accredited financial institutional pillar that may ease the hardships of paying off loans, improve opportunities of finance for the economic sectors that don’t suffer credit problems resulting from inefficiency of the financial situations of loaners, and help evaluate the level of risk when financing. It also eases the requirements of getting financing. There are many Arabian and international credit institutions that offer financial evaluation for institutions and banks. We should benefit from their experiences in developing the credit system in the Omani market. These systems are responsible for issuing economic evaluation and early alerts on the possible collapse of financial markets. There might be some concerns about the secrecy of data and information, but this part can have certain conditions that put the data under the responsibility of these institutions. For example, they should not be allowed to show any personal data of dealers or other sensitive data, which ensures that its work will only be credit evaluation with numbers and codes. Although the international institutions such as MasterCard company do have credit information about us like others, it uses them only in the official framework concerned with the safety of financial transactions; therefore, we need to place more trust in systems that are under our eyes. This will surely be a better choice than to be under the custody of others. We hope to see the establishment of such institutions that we lack in the Omani market. As they say, better safe than sorry. The sooner the better in establishing such institutions.